Posts Tagged ‘mortgages’

Synovus is no longer “looking” at the prospect of participating in the federal government’s financial business bailout; the decision has been made to do it. Tony Adams writes for the Ledger-Enquirer that Synovus recieved preliminary approval from the U.S. Treasury to sell $973 million of its preferred stock.

When I broke the story on October 15th that Synovus was “looking” at the fed’s offer, I reported that I suggested to Synovus Chairman and Chief Executive Officer Richard Anthony that the sale would mean the federal government would own part of Synovus. He agreed that it would, but it would not be able to vote the stock because it would be preferrred and not common stock.

Richard Anthony, Chairman and CEO, Synovus

Anthony told Adams, “What this capital does for the system and the individual banks is during this period of weakness and instability, it provides a new dimension of strength that I think we can use to our advantage from an investment standpoint, from a customer standpoint.”

Over the long haul. this development could even help the federal government. There is a good chance that it will make a profit when it sells the stock later.

Former Governor Roy Barnes saw this financial debacle coming and had the Georgia legislature pass a law to prevent it happening in Georgia. It held lenders accountable for their lending policies. Bill Shipp reports that K Street lobbyists in Washington tried to get Barnes not to do it, but they failed. In order to stop what Barnes was doing because it could have spread to other states, Wall Street bankers and K Street lobbyists poured money into the Sonny Perdue campaign. Once Perdue won the election, he saw that the Barnes’ law was dismantled.

You can get the details by reading Shipp’s column. Just click on this link.

Now I am beginning to really understand why people who have experienced an earthquake say, “It’s terrifying because you have absolutely no control over the situation.” It appears the only thing you can do is crawl under a desk or table or something and hope nothing strong enough to crush it falls on it.

That’s the way I am feeling about what’s happening on Wall Street and in Washington. Taxpayers are about to be saddled with $700 billion plus to bail out financial institutions. There is nothing I can do about it as I watch it being railroaded speedily through Congress.

Though this blog is mainly locally oriented, I have to talk about this mess. It is local in that it effects everyone in this area. It has me very frustrated and angry.

You and I are having to pay for the insane greed on Wall Street and almost eight years of deregulation in Washington that brought about this disaster.

The original Bush administration’s bill prevents any court review of anything the Treasury Department does after the $700 billion is handed over to them. Thankfully some members of Congress, Republicans and Democrats, are throwing up red flags on this one.

Rep. Dennis Kucinich (Dem. OH)

I like Rep. Dennis Kucinich’s idea.

“Since the bailout will cost each and every American about $2,300, tomorrow I will offer legislation to create a United States Mutual Trust Fund, which will take control of $700 billion in stock assets, at market value and not higher, convert those assets to shares, and distribute $2,300 worth of shares to new individual savings accounts in the name of each and every American,” Kucinich said in a statement that was published on the Truthout site.

It went on to say, “The Wall Street financial disaster is an opportunity to create a genuine ownership society. If Congress invests $700 billion in the market, then the American people must get something of real value for their investment.”

And why not? If we are being asked to put up $700 billion dollars, why shouldn’t we get something for our money. It won’t happen though. The Bush administration won’t even go along with the idea of including a stipulation in the bill that would prohibit the reckless CEO’s who are largely responsible for this debacle from getting multi-million dollar golden parachutes. In other words, they’ll get millions while others suffer from their actions.

Yes, the financial earth is shaking, and there is nothing I can do about it but look for something to get under to prevent from being hit by falling Wall Street debris. My only hope is that Congress will provide that shelter.